Don't get snared into free trial memberships

by Barbara Marquand

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Just before you finish buying something online, a new screen appears offering you cash back if you sign up for a free trial membership in a shopping club that promises you special discounts. What do you have to lose? So you sign up, finish your purchase, and forget all about it.

A couple of months later, a mysterious $10 charge starts appearing on your monthly credit card bill. What's going on? The free trial membership in the shopping club ended, and now you're paying monthly dues for something you never really wanted in the first place.

This all-too-familiar scenario was the subject of a U.S. Senate Committee on Commerce, Science, and Transportation investigation in 2009. More than 30 million people have been enrolled in such deals, and several million people at any one time are unknowingly enrolled.

Online credit card use: Beware of tricky transaction processes

The report studied three Connecticut-based marketing companies, Affinion, Vertrue, and Webloyalty, which partner with hundreds of trusted online retailers to sell shopping club memberships. The Senate committee report said the companies' sales tactics "exploit consumers' expectations about the online checkout process."

How?

The offer for the trial membership is inserted during the transaction process. So if you're not careful, you might unwittingly agree to join a shopping club, thinking you're merely continuing your purchase. And you probably don't realize that your credit card number, which you gave to the online retailer to make your purchase, is given to the company who is marketing the shopping club membership.

Membership fees may continue even after you have asked for a refund

Companies that market these memberships online have many years of aggressive telemarketing and direct-mail marketing experience. If you do a lot of online shopping, you could find that you've inadvertently signed up for multiple shopping club memberships, and cancelling these memberships is often an uphill battle. According to the investigation, Webloyalty and Vertrue agents did not inform all consumers about their additional memberships. Consumers who mentioned the "magic words" (Attorney General, Better Business Bureau, and bank representative) were more likely to receive a full refund when trying to cancel the membership.

Tips for using credit card online

Consumer Action suggests the following to avoid getting snared:

Read each screen carefully when you shop online with your credit cards, and don't click on any agreements until you understand them.

Don't agree to free trials of membership or loyalty clubs.

Call the retailer right away if you accidentally sign up for a deal you don't want.

These online marketing arrangements are yet another reason to review your credit card statements thoroughly each month. It's easy to miss a $10 charge here and there if you make most purchases with your credit cards. Investigate any charge you don't remember.

Cancel a membership immediately if you discover you enrolled by accident, and of course call your credit card companies any time there's a charge that you didn't make.

General Disclaimer: *See the online credit card applications for details about terms and conditions of credit card offers. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the "Apply Now" button you can review the credit card terms and conditions on the credit card issuer's web site. Offers are subject to change without notice and the terms displayed may not be available to all consumers.